Wharton Global Family Alliance

Family offices play a crucial role in managing generational wealth – balancing investment strategy, succession planning, and family harmony – but their inner workings are typically shrouded in secrecy. The seventh bi-annual survey by Prof. Raphael ("Raffi") Amit and the Wharton Global Family Alliance brings rare insights into this secretive club. Swipe for key takeaways and read more here:?https://whr.tn/43lHIRh Survey data reveals that many family offices face growing challenges in leadership transitions, technological adoption, and long-term strategy. While they are skilled at preserving wealth, they often struggle with succession planning, with few formal structures in place to transition leadership. #FamilyOffice?#FamilyBusiness #WealthManagement?#Succession

Mastering tough conversations is much easier when you’re having this much fun! The inaugural cohort of the Wharton Family Office Program: Balancing Family Harmony with Financial Prosperity kicked off last week with an engaging afternoon session on communication with Prof. Raphael ("Raffi") Amit and Deputy Dean Nancy Rothbard. Financial prosperity in a family office context hinges on family harmony sustained through effective communication. During this experiential session, participants gained valuable insights focused on: - The profound influence of communication styles and power dynamics - Tailoring messaging to resonate with different audiences - Striking harmony between conflicting (and complementary) styles in families and partnerships - The importance of maintaining an open mind and evolving your communication style over time A big thank you to Professors Amit and Rothbard and to all of our participants, along with Academic Directors Raffi Amit and Bilge Yilmaz, for making this first cohort such a tremendous success!

We’re thrilled to share that Professor Raphael ("Raffi") Amit, co-founder of the Wharton Global Family Alliance, has been recognized as Family Capital’s #1 academic in the FamCap25. This honor highlights his groundbreaking research and leadership in family enterprise and family office studies, which continue to shape the future of this dynamic sector. From his pioneering research in Entrepreneurship,?Strategic Management, and Venture Capital to his highly cited research on family enterprises and family offices?as well as his unparalleled Board of Directors experiences, Raffi sets the benchmark for excellence. As one reader aptly noted: “Amit is the benchmark for all others in the family enterprise world of academia. His research is more pertinent than ever.” #FamCap25 #FamilyOffice #Wharton

The survey data shows a slower adoption of AI tools and other emerging tech among family offices. Yet there’s a growing consensus that these technologies could transform how every business operates, family offices included. Eventually, it seems likely that many areas of family office operations may be influenced by AI and similar tools, but for now, adoption may be beneficial. That said, by not embracing AI, families might miss out on efficiencies and returns they could otherwise achieve. In fact, being slow in adopting this technology might drive more of them to outsource investment management to third-party firms who leverage AI for better outcomes. It will be fascinating to see just how much AI and other technologies will reshape the investment landscape in the coming years…and importantly, whether families embrace this evolution or risk being left behind. The technological transformation of family office operations currently underway will be an integral part of the week-long Wharton Family Office Program scheduled for January 13-17, 2025.? #GenerativeAI #FamilyOffice #InvestmentManagement #AIFuture #WealthManagement #AIInnovation #InvestmentStrategy #TechnologyInFinance #FamilyCapital #wharton #whartonexeced

Families have long been attracted to direct investing for its potential for higher returns, apparently lower fees, and the chance for direct company involvement. However, it can be very difficult for families to consistently succeed in direct investing, especially over the long term. ? What’s interesting to me are the strategies that families pursue in executing a direct investment program. For example, why don’t family direct investors focus more on investing in other family businesses, where their capital certainly would be advantaged over traditional institutional capital – and likely more philosophically aligned? What’s also notable is that so many families are taking on cross-border risk in their direct investments. These risks include geopolitical, cultural, exchange rate, and potential capital return challenges. Geographic diversification and local partnerships might be part of the appeal. ? Family capital is also permanent and proprietary, allowing for maximum flexibility in implementing a direct investing program. In particular, family capital allows for duration flexibility, which, in theory, should allow families to maximize compounded returns by holding onto the right investments for longer. Yet, interestingly, most families don’t hold their direct investments beyond ten years. That tells us they’re valuing liquidity over maximum value creation. ? While direct investing may offer families attractive opportunities for control and return, it also brings distinct challenges, especially around scale, team, and long investing cycle commitment. Balancing these factors is key for any family who wants to pursue a direct investing strategy, as opposed to accessing the private market with less demanding strategies and approaches. #PrivateInvestments #FamilyOffice #InvestmentStrategy #PrivateEquity #WealthManagement #DirectInvesting #FamilyBusiness #InvestmentOpportunities #FamilyCapital

Direct Private Investments: Surprising Trends Among Family Offices Welcome to the second post in our LinkedIn series, analyzing the 2024 Wharton Family Office Survey. Direct private investments have become increasingly popular among family offices, driven by the pursuit of enhanced returns. However, the latest trends in the ways in which family offices invest are rather unexpected. While direct investments offer significant potential, success depends on the right expertise and partnership strategies. As we see in the survey, close to 50% of families that engage in direct private investments have been doing so without staffing up with PE professionals. Surprisingly, only 12% of families consider investing in other family businesses central to their strategy, despite the clear advantages family capital holds when invested alongside like-minded users of capital who understand its unique value. Interestingly, 70% of these investments are syndicated, with families prioritizing trusted relationships, value alignment, and the ability to add value when selecting syndication partners. While many families self-generate deal flow, they also rely heavily on their networks of other family offices and professionals. The data also shows that 60% of families are making cross-border investments. It's remarkable that so many feel comfortable navigating the risk of going outside their borders, particularly when they often lack in-house expertise and only hold a minority position. However, the reliance on syndicates may explain this confidence, as many families partner with those who have the necessary knowledge in unfamiliar geographies. The short hold duration for direct investments is another puzzling trend. Only 15% of families hold investments for more than 10 years, despite the perpetual nature of family capital and the potential advantages of extended hold periods. In fact, current survey statistics show that 30% of investments are held for 3-5 years akin to traditional PE hold periods, with 55% of investments being held for 6-10 years. In a challenging private direct investment environment, families are implementing some surprising strategies in pursuit of investing success – many of which may yet prove to be winning strategies in today’s changing, competitive market. ? Data source: 2024 Wharton Family Office Survey #PrivateInvestments #FamilyOffice #InvestmentStrategy #PrivateEquity #WealthManagement #DirectInvesting #FamilyBusiness #InvestmentOpportunities #FamilyCapital #FamilyEnterprise #Wharton #Whartonexeced

Every other year, the Wharton Global Family Alliance conducts the Wharton Family Office Survey, a survey that seeks to uncover new insights relating to the trends and performance drivers shaping family offices today. With 21 countries represented in the seventh survey and the AUM of the majority of participating family offices in excess of $500 million, this year’s results revealed several meaningful insights and best practices from around the world. Over the next few weeks, Paul Carbone from Pritzker Private Capital will be joining me in highlighting and analyzing some of the survey’s key findings. #FamilyOffice #AlternativeInvestments #FamilyBusiness #FamilyCapital #WealthManagement #FamilyEnterprise #Wharton #Whartonexeced

It’s clear from the survey data that families struggle with putting structure, process, and formality around family succession and transitions. That’s because there are several overarching challenges families face during the transition from concentrated to dispersed ownership. These challenges include:? ·???????Reaching consensus on major issues; ·???????Balancing the diverse interests/viewpoints of different family members; ·???????Managing the liquidity needs of different generations against the desire of the family to preserve the real value of its wealth; and ·???????Attracting and retaining talent from outside of the family while maintaining the importance of involving family members in the business’ management.? That is why, when planning for transitions, fundamental questions need to be asked and answered. ?Neglecting to deal with these challenges, as many families apparently do, can have dangerous implications for family cohesion, legacy and the family dynamic. Take heed of this survey’s results and begin having these tough – but very important – conversations, sooner rather than later.#SuccessionPlanning #FamilyBusiness #Leadership #NextGen #WealthPreservation #FamilyOffice #BusinessContinuity #WealthManagement #FamilyCapital #WealthManagement #FamilyEnterprise #Wharton #Whartonexeced

We're looking forward to examining the results from the Wharton 2024 Family Office Survey at a deeper level in the Wharton Family Office Program: Balancing Family Harmony and Financial Prosperity - a new program running January 13-17, 2025 here at Wharton Executive Education. This survey, which is arranged by Raphael ("Raffi") Amit and his team at the Wharton Global Family Alliance, is filled with insights on the performance drivers of today's family offices. He's been sharing some of his analysis here on LinkedIn for those interested! #whartonexec #wharton #familyoffices #familywealthmanagement

Thanks Bill for highlighting the Wharton Family Office Program scheduled for January 13-17, 2025 at Wharton Executive Education. The program is targeted at Families and their closest advisors. It will include sessions on effective communication among family members, succession management, governance, preparing NextGen for leadership roles, the nuts and bolts of running a family office in addition to multiple sessions on investment management.. The program aims to help families, large and small, sustain family unity and harmony along with financial prosperity.